Barnes And Noble And Microsoft Team Up To Push Etextbooks

May 1, 2012

A new partnership announced this week between Barnes & Noble Inc. and Microsoft Corp. will focus on promoting digital textbooks to college students.

As reported by The Chronicle of Higher Education Barnes & Noble will own about 82.4 percent of the new subsidiary, while Microsoft will invest $300 million for a 17.6 percent ownership. The partnership has yet to be named, but for the present is being referred to as Newco. According to Jamie Iannone, president of Barnes & Noble Digital Projects, the partnership should ultimately "accelerate the adoption of e-reading in the college space."

That goal is significant, because studies have found that the vast majority of college students prefer printed textbooks over digital ones. "Anytime I really get on my computer, my mind and my hands automatically go to Facebook or Gmail or all the different things I do on my computer every day," explained Daniel Mason, a student at the University of Denver who was interviewed by The Denver Post. "Also, I'm always doing work on my computer, so it's nice to give my eyes a rest and just look at plain old paper instead of having to stare at the LCD screen."

But many predict that students' attitudes towards e-textbooks will soon change. Charles Schmidt, a spokesman for the National Association of College Stores, told The Chronicle that he expects sales of digital textbooks to rise as younger students who are more comfortable with online reading enter college, and as content becomes more interactive.

"Most e-textbooks are slightly glorified PDF's of the print version, although that's changing," he told The Chronicle. "Digital e-books sell for about 60 percent of the cost of a new printed copy. Since students can go to their college store and rent a print copy for between 33 and 55 percent of the cost of a new book, the e-book really needs to have more functionality to make the higher price worth their while."

Matthew Montgomery of eCampus.com, who was interviewed by The Denver Post agreed that it's probably only a matter of time before digital textbooks become the norm for college students. "We do see [e-books] taking over the college textbook market once kindergartners are learning via e-text and those students have made it to college," he said.

Todd Day, senior industry analyst at the market research firm Frost & Sullivan, who was interviewed by SmartMoney, also agreed. "E-textbooks are definitely a growth space right now," he said, "and most [tech] companies are looking at their long-term potential."

Compiled by Yaffa Klugerman